The US edged closer to military action last night with the Senate Committee voting approval, next step is the full senate vote on Sep 9th. Despite this oil and gold prices both fell. The US Beige Book also showed modest expansion in the US (http://www.bloomberg.com/news/2013-09-04/fed-says-modest-to-moderate-growth-spurred-by-home-car-sales.html). Sustainable growth in the US and even the global economy is a good thing, not like the crazy “Naughties” where bubbles were created everywhere. Some argue that with the printing of cash, bond purchasing and currency wars is creating bubbles, and if you lived in an emerging market like Thailand, Brazil, Mexico, India or Philippines you would certainly feel the bubble bursting this year. The larger economies have seemed to shift their immediate issues offshore to the little guys; a quiet little act of the rich robbing the poor.
A big day for economic announcements today with 3 tier 1 releases from 3 of the top 5 largest economies. Also 3 of the guilty parties involved in the act above. The BOJ, BOE and ECB are all involved in devaluing their currency in one way or another. Whilst it is well known that the US Fed and FOMC are wanting to end their program at an unspecified time, these other 3 have all stated in the their last meetings that they will continue unabated indefinitely. Will be interesting to see if that stance changes today with the good economic figures coming from Euro, UK and US in recent months.
DATA HIGHLIGHTS TODAY – AU Trade balance. JAP Monetary Policy Statement. UK Monetary Policy and Interest Rates. EU Monetary Policy and Interest Rates. US Unemployment claims and Non-Manufacturing PMI.
AUDUSD – Tagged the 50ema overnight and closed above major resistance. Great strength and seems to be forming a base here in the high 80’s low 90’s. A sign of greater strength to come? If we get decent economic leaders yes. A strong currency is a sign of a strong economy. Plain and simple, if China hadn’t had huge monetary injection and construction expansion from 2007 – 2012 we would have been busted broke since Crudd, Jules and Swany couldn’t manage a lemonade stand. We are not far from broke as it is with huge debt thanks to those muppets. Seriously disgusted and if Australia votes them back in I will give up. What the Aussie dollar will struggle against though is the rising greenback so we could be in for protracted frothing.
EURUSD – A nice ring low on the Euro but middle of immediate range of 1.34-1.30 sitting right on 1.32. Although this looks good on the chart and is in line with the other majors I don’t want to play today with the ECB out tonight. There are rumours of a rate cut in the Eurozone and too much background noise despite the bounce in Germany economy.
GBPUSD – HH/HL’s as the cable continues to along the trend line. Expect Carney to support this trend with the BOE tonight. Carry on Jeeves.
NZDUSD – They must have heard me, they woke up! Welcome back cousins. Also tagged the 50ema but I am not convinced of its intentions just yet. One bar does not make a trend.
USDCAD – A strong seller bar but and LH/LL, held above recent minor support 10475. Similar to the kiwi I am not convinced yet. Maybe after Sep 9th this will get interesting.
USDJPY – Just can’t get through the resistance level and I do not see the BOJ doing anything today to change that. Could be wrong (that does happen from time to time) about that, but time will tell and I do not see any reason to risk my hard earned on trade yet.
GOLD – Yep, resistance was too much with the sellers spanking the yellow metal back down and now forming “train tracks”. So a low test followed by the tracks equals “mum, I’m confused I wanna go home” as it cannot make a choice on which way to go.
David Long / Proprietary Trading Manager